Renewables will likely account for around 53 percent of European power supply in 2030, according to Wood Mackenzie, with most countries on track to deliver on their individual National Energy and Climate Plans.

However, despite the success of wind and solar, European governments, regulators and investors must continue to work hard toward climate-energy goals.

The transformation of European electricity is already well underway. Annual power supply from wind and solar will exceed production from coal in Europe in 2019. The future for Europe’s coal generators is bleak, with factors including higher emissions costs, competitive gas and phaseout policies impacting the fuel.

Continued growth in wind and solar power will drive substantial decarbonization of Europe’s electricity sector.

Europe Renewable Share (RES-E)

Source: Wood Mackenzie European Power & Renewables Service

Renewable sources supplied one-third of European power in 2018. Wind energy was the single-largest low-carbon producer, accounting for around 12 percent of overall supply in the region. Solar power accounted for 4 percent of supply.

Renewables are on track to account for most of Europe’s power supply within 10 years, accounting for 60 percent of the market by 2040.

European power markets look different today than they did a few years ago and coal’s rapid decline — hastened by low gas prices — is perhaps the most significant recent change. Carbon-intensive sources of power will be ruled out by policy if they cannot be priced out by markets.

Nuclear remains the region’s single-largest source of power but will also decline as older reactors retire and very little new build is seen.

Gas’ contribution will rise as coal and nuclear fall, surpassing production from nuclear in the early to mid-2020s. By this time, the combined supply from wind and solar will rival gas — with wind alone producing more electricity than gas by late in the decade.

According to Wood Mackenzie research, the cost of flexible gas generators will remain relevant to power price formation, although European power prices will become increasingly volatile as the volume of variable supply mounts.

The extent of power price fluctuation in Europe will depend on the mix and volume of renewables relative to demand on an hourly basis. Energy storage's ability to flatten this profile will increase in importance as the transition moves forward.


Peter Osbaldstone is a Wood Mackenzie Research Director and key contributor to the newly launched European Power & Renewables Service. Peter will host a webinar on 15 January 2020 where he will share key insights from the new service. To attend, register here